Indian oil firms drop sugar-based ethanol from 11 bn-litre tender

State-run Indian oil marketing companies excluded ethanol made from sugarcane juice, sugar syrup and B-heavy molasses from an Oct. 16 BPCL tender seeking about 11 billion litres for 2026-27, according to the tender document.

That volume is tied in the tender to India’s requirement for 20% ethanol blending in petrol, while the same document lowered the maize-based procurement price to ₹68.86 per litre from ₹71.86.

Bharat Petroleum Corporation Ltd. issued the tender on behalf of oil marketing companies for the supply year beginning in November, according to the tender document quoted by Times Now News.

"The Government of India has issued directions that sugar diversion for ethanol be reduced to zero for ethanol supply year 2026-27," the tender document said.

The same document said, "No offers have been sought for ethanol produced from sugarcane juice, sugar or sugar syrup and B-heavy molasses in this quantity bid tender."

Ethanol, an alcohol made from crop feedstocks, is blended into petrol to reduce the share of fossil fuel in motor fuel. India’s programme has used both grain-based and sugarcane-based supply, creating demand for distilleries and agricultural producers.

The reported tender terms increase the role of alternative raw materials after removing several sugar-linked sources from the current procurement round. For maize-based ethanol, the incentive was cut to ₹2.79 per litre from ₹5.79, according to the report.

Times Now News reported that the decision comes against concern over sugar availability and prices after weak rainfall in Maharashtra and Karnataka, two major sugar-producing states, raised the risk of lower output. The reported terms did not specify how bidders would replace the volumes previously supplied from excluded sugar-based feedstocks.

Source: tender document reported by Times Now News, Oct. 18, 2026